New legislation to crack down on rogue
traders: EU-wide enforcement network given green light

Commissioner David Byrne welcomed yesterday evening the final adoption
of a new EU law to help prevent unscrupulous traders evading consumer protection
authorities by targeting consumers living in other EU countries. The Council of
Ministers formally approved legislation to create an EU-wide network of national
enforcement authorities capable of taking co-ordinated action against rogue
traders who abuse the freedom of the EU's Internal Market in order to run cross
border scams. The new law, which was initially proposed by the European
Commission in July 2003 (see IP/03/1067),
will remove barriers to information exchange and cooperation. It also empowers
enforcement authorities to seek and obtain action from their counterparts in
other Member States. Adoption of the new law today was made possible by a
political agreement on the legislation reached earlier this year between
Parliament and Council (see IP/04/655).
The new EU-wide enforcement network will start work in 2006.

“Cross-border scams don’t just cheat consumers. They also
undermine confidence in the EU’s Internal Market. Member States need to
work together to root out the rip-off merchants. Our EU-wide enforcement
network gives them the means to do that”, said David Byrne, the European
Commissioner for Health and Consumer Protection. “Rogue traders have been
put on notice: they will soon have no hiding places in the EU.”

Cross-border scams: a growing problem

Catching rogue traders is hard enough in a single Member State but it can
become almost impossible when they relocate to another country, as increasing
numbers appear to be doing. Cooperation between national consumer protection
authorities is the only way to ensure such rogue traders are brought to justice.

Cross-border problems appear to be growing as rogue traders adapt to new
technologies and opportunities. For example, the European Advertising Standards
Alliance (EASA) estimates that around 63% of the cross-border complaints
received between 1992 and 2002 concerned rogue or peripheral traders.

The new law is designed to enable national authorities to exchange
information and cooperate with counterparts in other Member States as easily and
seamlessly as with other authorities in their own country.

It obliges each Member State to enforce EU law in its territory on behalf of
all EU consumers, and requires them to designate a public enforcement authority
to be part of the EU-wide mutual assistance network. Each of these authorities
will be able to call on other members of the network for assistance in
investigating possible breaches of consumer laws, and taking action against
rogue traders. This should help boost the confidence of consumers and business
in the Internal Market.